20Chp20-Econ3310 - Expenditure Multiplier ISLM Model...

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Unformatted text preview: Expenditure Multiplier ISLM Model Remember that prices are assumed to be fixed. (equilibrium in the money market) LM curve is the combinations of interest rates and aggregate output for which MD = MS IS curve is the relationship between equilibrium aggregate output and the interest rate (equilibrium in the goods market) Let’s add money and interest rates to the Keynesian framework The ISLM Model Aggregate Output ...
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This note was uploaded on 02/14/2012 for the course ECON 3310 taught by Professor Dix during the Fall '08 term at York University.

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